Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $115.3 million, a 37.7% increase year-over-year from $83.7 million in Q3 2024, driven by a 39% increase in brokerage revenue [17][19] - Gross profit increased by 39.1% year-over-year, reaching over $9.6 million, with a gross profit margin consistent at 8.3% [6][18] - Adjusted EBITDA improved to $6,000 in Q3 2025 from a negative $1.4 million in Q3 2024, reflecting higher revenue and improved operating leverage [20] Business Line Data and Key Metrics Changes - Brokerage segment revenue was $109.2 million, a 39% increase year-over-year, primarily due to the acquisition of My Home Group [20][21] - Mortgage segment revenue increased to $3.5 million from $2.9 million, with adjusted EBITDA of $161,000 compared to a loss of $319,000 in the prior year [23] - Veras Title revenue grew by 28.6% to $1.8 million, although adjusted EBITDA showed a loss of $191,000, worsening from a loss of $92,000 in the previous year [24] - Technology segment revenue was $829,000, up from $785,000, with adjusted EBITDA improving to $488,000 from $152,000 [25] Market Data and Key Metrics Changes - The residential real estate market is showing early signs of recovery, with narrowing spreads between the 10-year Treasury yield and the 30-year mortgage rate [26] - The company anticipates that small brokerages will explore opportunities to merge with or partner with larger firms, indicating a trend towards consolidation in the industry [28] Company Strategy and Development Direction - The company aims to diversify revenue streams with higher margin products and services, expand flagship programs like Elevate and Start, and strengthen attach rates across mortgage and title [29] - The Elevate program is designed to enhance agent productivity and profitability, with over 165 agents already onboarded [12][29] - The acquisition of Start Real Estate is expected to capture a significant share of the first-time home buyer market, with plans to expand into more states [13][29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the housing market's recovery and the potential for programs like Start Real Estate and Elevate to gain momentum [26][27] - The company is focused on achieving operational cash flow breakeven by Q2 2026, with a commitment to disciplined execution [29] Other Important Information - The company ended the quarter with $9.8 million in cash, including $6.5 million from a public stock offering [25] - The company has not made any share repurchases during the first nine months of 2025 [25] Q&A Session Summary Question: Can you elaborate on the go-to-market strategy for IntelliAgent licensing? - The company has established relationships with several hundred small brokers and plans to accelerate discussions with the identified 18,000 brokers in Q1 of next year [31] Question: What are the attach rates for Start Real Estate as it expands into more states? - The attach rate for Start Real Estate is over 70%, and the company anticipates maintaining this rate as it expands into new states [33][34]

Summary of Fathom Holdings Conference Call Company Overview - **Company**: Fathom Holdings (FTHM) - **Industry**: Real Estate Services - **Business Model**: Technology-driven end-to-end real estate services platform integrating residential, mortgage, title, and SaaS offerings for brokers and agents [1] Key Financial Highlights - **Q2 Revenue Growth**: 36% year-over-year [2] - **Transaction Growth**: 25% year-over-year [2] - **Agent Growth**: 23% year-over-year [2] - **Technology Investment**: Approximately $20 million [2] - **Projected Growth**: Anticipated 50% growth year-over-year when market conditions improve [6] Market Conditions and Trends - **Current Market Challenges**: The real estate industry has faced difficulties due to rising interest rates and home prices [2][4] - **Home Price Trends**: Average home price increased from $330,000 to $440,000 over the past four years; expected to decrease by 10% to around $400,000 [4][6] - **Interest Rate Outlook**: Anticipated decrease to 6.25%, improving affordability [6] - **Regional Trends**: Home prices in California have decreased by 3% year-over-year, indicating a potential nationwide trend [5][6] Unique Business Model - **Technology Focus**: Fathom positions itself as a technology company rather than a traditional real estate company, with a comprehensive ERP-like system for agents [3][7] - **Flat Fee Structure**: Charges a flat fee for agent commissions, contrasting with traditional percentage-based models [10][13] - **Concierge Service**: Introduced "Elevate," a concierge service to assist agents with non-sales tasks, enhancing agent productivity [10][14] Growth Strategy - **Acquisition Strategy**: Recent acquisition of My Home Group, adding 2,200 agents; plans for further acquisitions to expand market share [4][27] - **Licensing Technology**: Plans to license technology to small brokerages, creating a new revenue stream [23][24] - **Ancillary Services Growth**: Significant growth in mortgage (65%) and title (89%) businesses from January to June [25] Operational Efficiency - **Cost per Transaction**: Fathom's cost to close a transaction is less than $270, significantly lower than competitors [22] - **Agent Turnover**: Fathom has a turnover rate of less than 1.5% per month, compared to the industry average of 3% [13][31] - **Agent Satisfaction**: Recognized as a top company for agent satisfaction based on independent reviews [32] Management and Leadership - **Experienced Management Team**: The management team has extensive experience in navigating both good and bad market conditions [33] - **Board Composition**: Includes industry veterans with significant M&A experience and leadership in public companies [33] Future Outlook - **Market Recovery**: Anticipated increase in transactions to approximately 4.5 million next year, with a long-term projection of close to 5 million by 2027 [29][30] - **Expansion Plans**: Fathom operates in 43 states and aims to continue expanding its footprint [30][31] This summary encapsulates the key points discussed during the Fathom Holdings conference call, highlighting the company's performance, market conditions, unique business model, growth strategies, operational efficiencies, and future outlook.

Financial Performance and Key Metrics - Total revenue for Q2 2025 was $121.4 million, a 36.1% increase year over year from $89.2 million in Q2 2024 [16] - Adjusted EBITDA returned to profitability, reflecting improved operating leverage and a higher proportion of revenue converting to earnings [4][16] - Gross profit margin decreased to 7.7% from 8.5% due to competitive pricing pressure and increased transaction-related costs [17] Business Segment Performance - Brokerage segment revenue was $116 million, a 39.6% increase year over year, driven by the acquisition of My Home Group [19] - Mortgage segment revenue declined to $3.3 million from $3.7 million due to lower loan origination volumes [20] - Verus Title revenue increased by 90% to $1.5 million, driven by strong organic growth and improved closing efficiency [21] Market Data and Key Indicators - Active listings in June reached 1,100,000 units, marking a 29% year over year increase [12] - Median days on market rose to 53 days, up from 48 days a year ago, indicating a slower pace of sales [13] - Approximately 20% of listings have reduced asking prices, with some markets seeing declines up to 7% [14] Company Strategy and Competitive Landscape - The Elevate program is a key differentiator, enhancing agent productivity and generating high-margin recurring revenue [5][6] - The company is focused on expanding agent count and transaction volume while increasing blended margins through ancillary services [27] - A new partnership with Sovereign Realty Partners aims to extend the reach of the IntelliAgent platform and Elevate program [9][10] Management Commentary on Operating Environment and Future Outlook - Management believes the real estate market is set for a modest recovery, despite ongoing affordability pressures [12][14] - The company is confident in its ability to grow faster than the broader market due to its agent-centric model [14][27] - Future priorities include driving revenue growth, increasing margins, and sustaining adjusted EBITDA profitability [27] Other Important Information - The company ended the quarter with $4.9 million in cash, reflecting careful balance sheet management [24] - Monthly churn rate remains low at less than 1.6%, indicating strong agent satisfaction [11] Q&A Session Summary - No questions were raised during the Q&A session, indicating a lack of immediate concerns from analysts or investors [29]

Fathom Holdings (FTHM) Conference Call Summary Company Overview - Fathom is a real estate technology company providing a comprehensive solution for residential and commercial real estate, including brokerage, mortgage, title, and SaaS offerings [3][4] - The company operates in 43 states with plans to expand to five additional states in 2024 [4] Financial Performance - Q1 revenue grew by 32%, transactions increased by 26%, and agent growth was 22.8% [4][31] - Significant investment of approximately $20 million in proprietary software [4][22] - The acquisition of My Home Group in November 2024 added 2,200 agents and $100 million in revenue, expected to contribute $1.2 million in EBITDA in 2025 [4][28][29] Unique Business Model - Fathom's model differs from traditional brokerages by allowing agents to retain a larger portion of their commissions, charging a flat annual fee of $700 plus a transaction fee [11][12] - The company offers a concierge-level service and a virtual business model, which enhances agent support and efficiency [7][10] Technology and Efficiency - Fathom owns all its technology, which includes an ERP-like system for managing transactions and agent operations [18][19] - The direct cost per transaction is less than $270, significantly lower than competitors [19][26] - The Elevate program, launched recently, aims to provide agents with comprehensive support, potentially increasing gross profit per transaction by four times [14][15][26] Growth Strategy - Fathom aims to reach approximately 100,000 agents in the U.S., currently having around 15,000 [27] - The company anticipates organic growth to return to 15% and total growth (including acquisitions) to reach close to 30% [50][61] - The Elevate program is expected to generate approximately $1 million in EBITDA for every 100-120 agents [15][73] Ancillary Services - The mortgage business grew by 15% year-over-year, while the title business grew by 61% in Q1 [25][74] - Fathom aims for 50% of its ancillary business to come from non-Fathom agents, currently at over 60% [75] Market Position and Competition - Fathom is the tenth largest real estate company in the U.S. in a highly fragmented market with around 80,000 brokerages [9][60] - The company is not focused on competing directly with large mortgage companies like Rocket Mortgage, as it operates differently and relies on Fathom agents for business [54][55] Future Outlook - The company expects to achieve adjusted EBITDA positivity in Q2 2025, driven by cost reductions and growth in ancillary services [57][58] - Fathom plans to continue expanding its footprint and exploring acquisition opportunities in the fragmented real estate market [33][61] Management and Governance - The leadership team has extensive experience in real estate and technology, with a strong board of directors supporting growth initiatives [34][36] Additional Insights - Fathom divested from its insurance business to focus on higher growth opportunities, achieving a 32% growth rate in its core business [78] - The company has implemented AI solutions to enhance efficiency and reduce costs across various operations [51][52]

Financial Data and Key Metrics Changes - Total revenue increased by 32.1% to $93.1 million compared to $70.5 million in the same period last year, exceeding analyst expectations by approximately 12% [6][17] - Brokerage revenue rose nearly 36% to $88.9 million from $65.4 million last year, with gross profit improving to $8.1 million, a 13% year-over-year increase [6][7][8] - GAAP net loss for Q1 2025 was $5.6 million or $0.24 per share, compared to a loss of $5.9 million or $0.31 per share in Q1 2024, reflecting cost-saving efforts [19] Business Line Data and Key Metrics Changes - The brokerage business closed approximately 9,715 real estate transactions, a 26.1% increase from 7,703 transactions in Q1 2024 [20] - Mortgage revenue increased by 13% to $2.6 million from $2.3 million in Q1 2024, while title business revenue rose 43% to $1 million from $700,000 [14][23] - Adjusted EBITDA for the real estate division improved to approximately $1.6 million in Q1 2025, up from $800,000 in Q1 2024 [21] Market Data and Key Metrics Changes - Housing inventory increased by 16% in California, 20% in Utah, 28% in Colorado, and 18% in Georgia, indicating a shift towards a more balanced market [13] - Average home prices dropped year-over-year by 2.4% in Florida, 4% in Colorado, 8% in Kansas, and 5% in Illinois, reflecting market adjustments [14] Company Strategy and Development Direction - The company is focused on three core drivers for long-term profitability: expanding revenue through strategic growth, enhancing gross margins via agent programs like Elevate, and maintaining cost discipline [25][27] - The Elevate program aims to enhance agent productivity and profitability, with over 120 agents signing up shortly after its soft launch [9][10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism despite ongoing economic headwinds, stating that the company is well-positioned to benefit from improvements in market activity [4][14] - The company expects to achieve adjusted EBITDA profitability in Q2 2025, marking a significant milestone [5][27] Other Important Information - The company ended the quarter with a cash position of $8 million, including $2.7 million in net proceeds from a public offering [24] - Cost-cutting initiatives are projected to reduce expenses by approximately $750,000 per quarter going forward [5] Q&A Session Summary Question: Can you elaborate on how Elevate enhances profitability on gross profit and adjusted EBITDA per transaction? - Management indicated that the Elevate program is expected to increase gross profit margins by three to four times compared to traditional programs due to the efficiency of the platform [31][34] Question: Have discussions with similar-sized agent teams accelerated post-launch of Elevate? - Management confirmed increased conversations with various brokerages and technology partners since the launch of Elevate, indicating potential partnerships and licensing opportunities [36][37]

Financial Data and Key Metrics Changes - Total revenue increased by 32.1% to $93.1 million compared to $70.5 million in the same period last year, exceeding analyst expectations by approximately 12% [7][17] - Brokerage revenue rose nearly 36% to $88.9 million from $65.4 million year-over-year [8][17] - Gross profit improved to $8.1 million, a 13% increase year-over-year, with a 34% growth excluding divested Daggle Insurance [8][17] - GAAP net loss for Q1 2025 was $5.6 million or $0.24 per share, compared to a loss of $5.9 million or $0.31 per share in Q1 2024 [20] Business Line Data and Key Metrics Changes - The brokerage business closed approximately 9,715 transactions, a 26.1% increase from 7,703 transactions in Q1 2024 [21] - The Real Estate Division's revenue was approximately $88.9 million, a 36% increase attributed to the addition of My Home Group [22] - Mortgage revenue increased by 13% to $2.6 million from $2.3 million year-over-year [15][24] - Cyto revenue increased by 43% to $1 million from $700,000 in Q1 2024 [16][24] Market Data and Key Metrics Changes - Housing inventory rose by 16% in California, 20% in Utah, 28% in Colorado, and 18% in Georgia, indicating a shift towards a more balanced market [14] - Average home prices dropped year-over-year by 2.4% in Florida, 4% in Colorado, 8% in Kansas, and 5% in Illinois [15] Company Strategy and Development Direction - The company is focused on three core drivers for long-term profitability: expanding revenue through strategic growth, enhancing gross margins through agent programs like Elevate, and maintaining cost discipline [26] - The Elevate program aims to enhance agent productivity and drive long-term profitability, with over 120 agents signing up shortly after its soft launch [9][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism despite ongoing economic headwinds, stating that the results reflect discipline and execution [6] - The company expects to achieve adjusted EBITDA profitability in Q2 2025, marking a significant milestone [7][26] - Management remains cautious about broader market volatility but is encouraged by current momentum [27] Other Important Information - The company has reduced expenses by approximately $750,000 per quarter going forward [6] - The cash position at the end of the quarter was $8 million, including $2.7 million in net proceeds from a public offering [25] Q&A Session Summary Question: Can you elaborate on how Elevate enhances profitability? - Management indicated that Elevate's structure allows for a higher gross profit margin per transaction, potentially growing by three to four times compared to traditional programs [32][33] Question: Have discussions with similar-sized agent teams accelerated post-Elevate launch? - Management confirmed increased conversations with various brokerages and technology partners since the Elevate launch, indicating potential partnerships and licensing opportunities [36][38]